ITV profits drop in tough advertising market

ITV has reported a fall in annual pre-tax profit due to "ongoing economic and political uncertainty" in the UK.

The UK's biggest commercial broadcaster said profit in 2017 fell 10% to £500m, with a drop in advertising revenue partly offset by growth in its studios business.

ITV shares dropped about 8% in trading on the London Stock Exchange.

Chief executive Carolyn McCall said its 2017 performance was "strong" in a "challenging environment".

She expects 2018 advertising revenue to be up 1% in the first quarter, with a boost from football in the second quarter.

The World Cup, which ITV shares with the BBC, starts in June.

Ms McCall, who joined ITV from Easyjet in January, said that the advertising environment in the UK had been tough.

"The uncertainty has undoubtedly had an impact on the demand for television advertising and therefore as expected ITV's financial performance," she said.

The weaker pound and accompanying inflationary pressures led to some advertisers reducing spending, she said.

High Street retailers and entertainment and leisure businesses had cut their TV ad spending, but supermarkets had increased it.

ITV "had a great start to 2018", she said.

ITV's share of the number of TV viewers has grown this year, while online viewing has had double-digit growth, she said.